Attorneys representing Meta Platforms, including founder Mark Zuckerberg, have requested a Delaware judge to dismiss a lawsuit brought forth by investment funds. The lawsuit alleges that Meta has neglected to protect users of its social media platforms from human trafficking and child sexual exploitation.
Allegations of Negligence
The legal complaint asserts that Meta’s leadership has been aware of the ongoing issues with human trafficking and child sexual exploitation on Facebook and Instagram. Despite this knowledge, the company has failed to take appropriate actions to address these serious concerns.
According to plaintiffs’ attorney Christine Mackintosh, pedophiles and traffickers have been utilizing Meta’s platforms to facilitate illicit activities for an extended period. She emphasized the lack of proactive measures from Meta’s directors in implementing necessary oversight and controls.
Defense Arguments
In response to the allegations, attorney David Ross argued that the lawsuit lacks merit as Meta has not experienced the required “corporate trauma” as mandated by Delaware law. He also refuted claims suggesting potential future harm or loss based on speculation.
However, the plaintiffs counter that Meta has witnessed negative impacts, such as significant drops in share prices and market capitalization following media reports regarding illicit activities on its platforms. They further highlight the substantial legal costs incurred by Meta in related litigations and emphasize alleged reputational damage suffered by the company.
Dismissal of Lawsuit Requested by Meta
Meta is seeking dismissal of a lawsuit on the basis that the plaintiffs did not demand action from the board before filing. This demand is typically necessary before shareholders can file a “derivative complaint” on behalf of a corporation regarding harm caused by its officers or directors.
Plaintiffs’ Argument
The plaintiffs argue that the demand requirement should be waived as they consider it “futile.” They believe that board directors, who are defendants, are likely to face liability and many are under the influence of Zuckerberg rather than being independent.
Allegations Against Meta Directors
According to Mackintosh, Meta directors have overlooked several warning signs, such as lawsuits, media coverage, shareholder resolutions, and increased scrutiny from lawmakers and regulators on online activities. She mentioned that documents provided by the company show minimal board discussions on issues like human trafficking and child sexual exploitation.
Meta’s Response
In response, Meta spokesman Andy Stone stated that the company has been actively combating abuses both on and off its platforms for over a decade. He mentioned their support for law enforcement in apprehending and prosecuting criminals involved in such activities.
Legal Liability of Corporate Directors
Under Delaware law, corporate directors can be held accountable for failing to ensure legal compliance with relevant statutes. However, there is ongoing debate within legal circles regarding whether Delaware’s law on director oversight applies to business risks beyond legal compliance.
Judge’s Comments
Judge Laster highlighted a potential scenario where failing to address a significant issue like child pornography could trigger legal consequences for directors. He anticipates making a ruling on this matter in the future.
Leave a Reply