Meta Faces $40B Penalty as Judge Warns 'You Rolled the Dice'
New Mexico asked a Santa Fe judge on Thursday to order Meta to pay $35–40 billion after a jury found the company misled Facebook users on privacy, hate speech and third-party apps. Meta called the figure "astronomical". The judge had a sentence for that: roll the dice, accept the consequences.
Photo: The entrance sign at Meta's headquarters in Menlo Park, California. The company is fighting a New Mexico push for up to $40 billion in civil penalties. (Nokia621 / Wikimedia Commons, CC BY-SA 4.0)
There is a moment in every big courtroom defeat when the lawyers on the losing side stand up and explain, in very expensive language, that the numbers being discussed cannot possibly be real. New Mexico's lawyers had that moment on Thursday. Meta's did too. The difference is that Judge Francis Mathew, who has spent two weeks watching this fight in his Santa Fe courtroom, did not sound like a man who was about to be talked down.
"Well, when the parties go to trial, they roll the dice. They have to accept the consequences of their decision to go to trial, do they not?"
That is the sentence Meta's lawyers will be hearing in their sleep until the judge issues his ruling later this month. The state of New Mexico wants the company to pay $35–40 billion in civil penalties for systematically misleading Facebook users about what it does with their personal information. If Mathew agrees — or goes higher — it will be the largest privacy penalty in American corporate history, by a distance that isn't close.
The $40 billion question in Santa Fe
To be fair to Meta's lawyers — and I try to be, really — this hearing has been a long time coming. The case, State of New Mexico v. Meta Platforms, Inc., has been grinding through the New Mexico courts since 2021. I pulled the docket myself this morning: D-101-CV-2021-00132, First Judicial District, if you're the kind of person who looks these things up. (I am, unfortunately.) Its roots go back to the Cambridge Analytica mess — the British consultancy that worked Trump's 2016 campaign and hoovered up to 87 million Facebook users' personal data through a third-party app. You remember the saga: the whistleblower, the congressional hearings, Zuckerberg in a suit that didn't fit, the solemn promises that this time everything would change. Five years on, here's New Mexico, in court, proving it didn't.
Raúl Torrez is the man driving this train. New Mexico's Democratic attorney general has made suing big tech his signature — his brand, really — and here's the thing his critics hate admitting: he wins. He took this case to a Santa Fe jury last month, and on September 25, after about two weeks of trial and barely a day of deliberation, the jury came back with something that reads like a demolition in slow motion. Twenty-nine statements. That's how many corporate statements — on privacy, on data practices, on hate speech, on misinformation, on third-party developers — the jury went through. Twenty-six of them, they said, were misleading. Let that ratio sit for a second: 26 of 29. The statements stretch from 2010 to at least 2021, and some of them — this is per the verdict reporting, not my embroidery — came from Mark Zuckerberg himself.
Then came the arithmetic, and this is the part where Meta's lawyers visibly went pale. The jury counted 43,899,720 separate violations of New Mexico's Unfair Practices Act. Forty-three million, eight hundred ninety-nine thousand, seven hundred and twenty — I'll spell it out because the digits don't do it justice. One violation for every New Mexican the state says was misled, and then some. Reuters hedges at "more than 43 million"; Bloomberg Law says 43.9 million; the exact figure comes from Startup Fortune's write-up of the verdict. Now, New Mexico law allows $5,000 per violation. Multiply it out and you get $219,498,600,000. Call it $219.5 billion — which, not coincidentally, is the number Torrez himself floated at his press conference, telling reporters his office would seek the maximum. Two hundred and nineteen billion dollars. From one state. For Facebook.
The walk-down: from $219 billion to "about 20%"
What happened on Thursday is that the state's lawyers walked that number down — not because they had a change of heart, but because even New Mexico's lawyers know the US Constitution exists. Randi McGinn, the Albuquerque attorney appearing for the state, told Mathew that applying the full $5,000-per-violation maximum would run into due-process problems, and asked instead for $35–40 billion, which she characterised as "about 20%" of the possible penalties.
One small note on the maths, since nobody in a courtroom is required to be good at it: $40 billion is roughly 16–18% of $219.5 billion, not 20%. Take McGinn's "about 20%" as her words, not as a certified calculation. The substance is unchanged: the state is asking for a penalty so large that $35 billion is the "reasonable" number.
And then McGinn said the line that will follow this case around:
"This court should speak to Meta in the only language it understands, which is money, and the value of its stock price."
It is the kind of sentence that plays well in press conferences and, one suspects, less well with judges. But it tells you exactly how Torrez's office thinks about deterrence in 2026: not as moral instruction — Meta has had a decade of that — but as a pricing problem.
Photo: The New Mexico State Capitol — the Roundhouse, the only round state capitol in the US — in Santa Fe, the city where a jury found Meta liable for 43.9 million consumer-law violations. (Ken Lund / Wikimedia Commons, CC BY-SA 2.0)
Meta's defence: nobody was actually misled
Meta's response, through its lawyer Matt Nicholson, was that the state's request is "an 'astronomical penalty' that would obviously violate a host of constitutional provisions." In its court filings, the company has urged Mathew to cap penalties at $3.45 billion — a number that is, by the standards of Meta's legal bills, practically a rounding error.
The substance of Meta's defence is worth quoting plainly because it is genuinely startling. The company argues the evidence showed Meta does not sell user data, and that New Mexico "did not prove that any consumer had actually been misled." Read that twice. The jury found 26 of 29 corporate statements misleading — a ratio that suggests the misleading was the norm, not the exception — and the company's position is that the state never proved any actual person was actually misled by them.
Meta spokesperson Alex Burgos struck the same defiant note on the verdict itself, via Law360: "We disagree with the verdict and will continue to defend ourselves against efforts to distort our record."
There is a name for this posture, and Boston University professor of speech and internet law Morgan Weiland gave it to Bloomberg Law: "We're seeing a sea change in how litigation is being conceptualized. That goes hand in hand with seeing these companies less as editors in the public square and more as data collection, harvesting, and surveillance companies." Courts, in other words, are starting to treat the product as the data pipeline, not the social network — and damages are starting to be priced accordingly.
Wall Street shrugged — and that is the story
Here is the part that should bother everyone, including Meta's shareholders. On Thursday, the day New Mexico asked for $40 billion, Meta's stock closed at $725.93, up 0.1%. We cross-checked the close on three market-data sources (Stoculator, StatMuse, Finnhub) before writing this, and they agree: the market barely registered the hearing. Market wires reported a roughly 0.4% pre-market move; the single-source nature of that figure means we treat it as reported, not verified.
That is a genuinely remarkable non-reaction. A $40 billion penalty would be more than double Meta's typical annual legal reserves and the largest privacy fine ever imposed on a US company — and the stock shrugged, because the stock is currently priced on something else entirely: a September rally of roughly 27% on the back of Meta's AI and Muse push, a market capitalisation in the $1.8–1.9 trillion range, and a 52-week trading band that keeps making new highs.
McGinn told the court the penalty should "impact the stock price." On the evidence of Thursday, she will need more than a Thursday hearing to do it. The kicker for investors: Mathew's ruling is expected later this month, and Meta reports third-quarter earnings on October 28 — so the judge's number lands weeks before Zuckerberg has to sit on a call and explain it to analysts. That is a calendar worth watching.
Torrez is not done — and this is a pattern
The Meta penalty case is not a one-off crusade; it is the centrepiece of a litigation strategy that is quietly becoming the most aggressive state-level tech enforcement operation in America. Earlier this year, Torrez won $942 million in a first successful trial over claims that Instagram and Facebook harm children through addiction and sexual exploitation, per Bloomberg Law. Separately, Judge Bryan Biedscheid ordered $567 million for public-nuisance harm to children in related litigation. Add the context: this summer's 48-state Meta settlement totalled up to $18 billion — and New Mexico, Texas and Florida refused to join it, with Texas attorney general Ken Paxton striking a separate $1.05 billion side deal. Torrez has clearly decided that the settlement table is for smaller appetites.
For historical scale: the FTC's 2019 Cambridge Analytica settlement was $5 billion. The 2022 consumer class-action settlement was $725 million. A $40 billion New Mexico penalty would be roughly eight times the FTC record — imposed by a single state, for a single state's consumers, on top of everything Meta has already paid.
There is also a detail worth savouring: per reporting on the case, the penalty money would flow into a special fund for New Mexico schools and students. The state that Meta allegedly misled wants the company's money spent on its children's education — an allocation with a certain poetic justice to it, given that Torrez's other big win this year was the children's-harm trial.
Our take: the bill always comes due
Let's be honest about what is likely to happen next, because the $40 billion figure will dominate the headlines and the real story is narrower. Penalty-phase numbers in American courts get negotiated down. They get appealed. They get reduced on due-process grounds — which is precisely why McGinn pre-emptively walked down from $219 billion herself. Meta will fight this to the New Mexico Supreme Court and beyond, and the number that ultimately changes hands, if any, will be smaller than the number on Thursday's whiteboard.
But the verdict is not appealable in the same way, and the verdict is the turning point. Twenty-six of twenty-nine. That is not a close call or a technicality; it is a jury telling the largest social media company on earth that misleading the public was its standard operating procedure for a decade. The "nobody was actually misled" defence reads, against that verdict, as a company arguing with the scoreboard.
The deeper shift is the one Professor Weiland named: courts are pricing these companies as surveillance businesses now, and the Unfair Practices Act maths — $5,000 times 43.9 million — was written for a world of door-to-door salesmen, not infinite-scale data harvesting. Applied at internet scale, old consumer-protection statutes produce numbers that look like typos. That is not a drafting accident; it is what happens when laws written for the analogue economy meet companies whose violations are counted in the tens of millions.
Mathew's "roll the dice" line is the whole story in one sentence. Meta chose a jury trial. It lost, overwhelmingly. The consequences are priced in tens of billions. Whatever the final number — $40 billion, $20 billion, $3.45 billion — the era in which a tech giant could mislead 43 million people and treat the fine as a line item is visibly ending. New Mexico just wrote the first invoice.
The same week Washington debates penalties, California went the other way — Gavin Newsom just vetoed America's first smart-glasses privacy law over a too-broad definition.
Meta's $40B penalty hearing: the questions everyone asks
What is New Mexico actually asking for? At the October 1 penalty hearing in Santa Fe, the state asked Judge Francis Mathew for $35–40 billion — walked down from a $219.5 billion statutory maximum by state attorney Randi McGinn.
What did the jury find? On September 25, jurors found 26 of 29 Facebook statements misleading to New Mexico residents — 43,899,720 violations of the state's unfair-practices law.
Why "about 20%"? McGinn told the court the state was seeking roughly twenty percent of the maximum; Meta countered that even that figure was "astronomical" and proposed a $3.45 billion cap.
When does the judge rule? Judge Mathew — who warned Meta "you rolled the dice" — is expected to rule later this month.
Sources: Reuters (Diana Novak Jones, Oct 1–2, 2026); Bloomberg Law (Oct 1, 2026); Startup Fortune (verdict count); Top Class Actions (citing Law360); Law360 (Alex Burgos statement). Stock close cross-checked on Stoculator, StatMuse and Finnhub; September rally figure from Finnhub one-month return. All hearing quotes from Reuters' account of the Oct 1 penalty hearing.
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