This article was originally published on Law360 and is republished here with permission as it originally appeared on November 12, 2026.

Meta’s recent settlement with 47 states, the District of Columbia and three territories, and two New Mexico verdicts against the company, are drawing renewed attention to a question that is rarely litigated: How should a state attorney general calculate a civil penalty?

The August settlement in In re: Social Media Adolescent Addiction/Personal Injury Products Liability Litigation, in the U.S. District Court for the Northern District of California, secured $17.1 billion.[1]

On March 24, in a verdict in New Mexico v. Meta Platforms Inc. over young users’ safety (also referred to as the minor safety litigation), a jury in the First Judicial District Court of New Mexico found that Meta committed 75,000 violations of New Mexico’s Unfair Practices Act and imposed the $5,000 statutory maximum on each, for $375 million.[2]

In October, in a separate suit commonly referred to as the Cambridge Analytica litigation — New Mexico v. Facebook Inc., also in the First Judicial District Court of New Mexico — Judge Francis Mathew calculated a penalty of $219.5 billion on the jury’s finding of 43,899,720 separate willful unfair or deceptive trade practice violations, reduced it to $25 billion, and imposed 15% annual interest until paid. Meta plans to appeal both awards.[3]

As state attorneys general continue to play an outsized role in society’s most pressing issues — Big Tech, artificial intelligence, gaming and financial services — states will be tempted to look to these eye-popping monetary verdicts to establish monetary settlement expectations.

However, the decisions should be treated as outliers, not a template. Indeed, judicial verdicts carry the potential to depart from how attorneys general have traditionally prioritized injunctive relief. Such departure is only magnified when the counting is done by private counsel paid a percentage of the result.

The Baseline: The “Doing Justice” Approach

Most consumer protection matters brought by attorneys general settle, and settlement penalties have historically reflected judgment rather than arithmetic. Attorney general offices weigh the seriousness of the harm; the defendant’s gain and culpability; its cooperation and remediation; its ability to pay; the need for deterrence; and what other states have accepted.

The statutory maximum monetary exposure has always framed the discussions, and the prospect of that exposure has long encouraged companies to agree to meaningful injunctive relief; it is rarely the opening demand. We commonly refer to this as the “doing justice” approach. A federal prosecutor is not supposed to seek the harshest available sentence; the government’s interest, as the U.S. Supreme Court put in 1935 in Berger v. U.S., “is not that it shall win a case, but that justice shall be done.”

State attorneys general have generally utilized the same approach: seeking a number that is fair given the conduct, not the largest number the statute can be made to produce.

Courts have applied a similar discipline in litigated cases. In 1981 in U.S. v. Reader’s Digest Association Inc., the U.S. Court of Appeals for the Third Circuit agreed that each of the 17,940,521 mailings was a distinct violation of a Federal Trade Commission consent order, yet sustained a total penalty of $1.75 million after weighing good faith, public injury and ability to pay — eliminating the violator’s benefits and vindication of agency authority.

Courts in at least six states, including Massachusetts, South Carolina and Washington, have looked to versions of those factors.

How the New Mexico Decisions Depart

In New Mexico v. Meta Platforms Inc., which alleged that Meta misled consumers about its platform’s safety for young users, the state sought more than $2 billion, based on roughly 208,000 monthly teen users and the $5,000 maximum on each of two claims. The jury found 37,500 violations per claim, and Judge Bryan Biedscheid added a $567 million abatement program and five years of platform reforms, for a total of $942 million.

The Cambridge Analytica litigation went further. The jury found 26 public statements — made between 2010 and 2021 on earnings calls, in interviews and elsewhere — unlawful and willful. It then treated each New Mexican in each statement’s “expected or reasonably anticipated audience,” either Facebook’s roughly 1.39 million monthly active users in the state or its roughly 2.1 million residents, as a separate violation. That produced the 43,899,720 violations under the same $5,000 cap that produced $375 million in New Mexico v. Meta Platforms Inc.

New Mexico did not simply abandon the balancing test. Judge Mathew expressly weighed factors including the duration and repetition of the conduct, senior leadership’s involvement, and what he called “the clearly intentional and systematic nature” of the misstatements. He also quoted 2014’s Atherton v. Gopin, in which the New Mexico Court of Appeals adopted a multifactor test for setting penalties below the statutory cap.

And both outcomes landed below the state’s theory of maximum exposure: The New Mexico v. Meta Platforms Inc. jury counted far fewer violations than the state sought, and the $25 billion award is about 11.4% of the computed maximum.

Contingency Fee Counsel and the Arithmetic of Resolution

Who does the counting matters. New Mexico tried the minor safety litigation and the Cambridge Analytica litigation with outside law firms retained on a contingency fee basis.

According to an Oct. 23 Reuters report on the contracts, outside counsel in the Cambridge Analytica litigation could seek about $1.27 billion if the $25 billion judgment is collected in full, and the minor safety litigation could result in a payout of about $67.1 million on the $942 million judgment.[4]

These fees help explain the shift. When attorneys general settle, they weigh the penalty factors themselves and arrive at a number they can defend as fair. When they litigate, they are more inclined to seek the statutory maximum and leave reductions to the court. Contingency fee counsel may push toward the second model. Their compensation rises with the recovery, and they tend not to view their role as doing justice by arriving at a fair number.

Attorney general enforcement power is designed to be wielded by neutral officials acting for the public, not for profit. When it is delegated to firms with a stake in the size of the result, the arithmetic of resolution changes.

How Injunctive Relief Can Suffer

New Mexico v. Meta Platforms Inc. is as notable for what it did not order as for what it did. Judge Biedscheid denied the state’s request for a child safety monitor, calling the proposed standards “extremely vague and, often, aspirational,” opting instead to police compliance himself through Meta’s semiannual reports.

He declined to order hard age verification, concluding that the federal Children’s Online Privacy Protection Act limits what a court can require, that verification for Meta alone would be “inequitable and unduly injurious,” and that “regulatory solutions to these problems lie in the executive and legislative branches and not with this Court” — a result the state argued stopped short of what the trial record showed was most needed.

The court also refused relief pertaining to Meta’s recommendation algorithm, autoplay and infinite scroll on Section 230 and First Amendment grounds. The lesson is that judicial appetite for structural, conduct-based remedies is limited: A court may multiply violations by a state’s population to calculate damages, but it is far more reluctant to redesign a product or install a monitor inside a company.

The multistate settlement involving the same issues as minor safety litigation, negotiated in the shadow of trial, secured exactly what New Mexico could not. Over a 10-year term, Meta must apply age assurance to every Facebook and Instagram user in the settling states within one year (subject to accredited third-party testing and numeric accuracy ceilings), and an independent auditor paid by Meta must issue five annual reports with public summaries and corrective action plans for any material gaps.

The settlement also blocks teen access to feeds from midnight to 6 a.m., sets a two-hour default daily limit (against New Mexico’s roughly three), offers teens a nonpersonalized feed, and disables like counts and cosmetic procedure filters by default.

Admittedly, New Mexico v. Meta Platforms Inc. won additional monetary relief not found in the multistate settlement, including the $567 million abatement fund, but the design and oversight terms that change how a platform operates came through negotiation, not litigation.

That is the tension: Money can be necessary where prior penalties failed to deter, as Judge Mathew found, but when a case is litigated to maximize the recovery — particularly by contingency fee counsel — the leverage that could have bought durable conduct commitments is spent on a judgment, and the conduct terms are left to a court that may be unwilling or unable to impose them.

What Companies Should Do

Companies that face New Mexico’s numbers being cited at the negotiating table should consider a variety of responses.

Demonstrate a commitment to proactive business changes.

Most matters still settle, and the strongest position at the table belongs to a company that has already acted. Companies should make and document meaningful changes to the challenged practices early — ideally before a demand is made — and support them with evidence of good faith, remediation, the absence of demonstrated harm, limited gain and comparable resolutions.

A record of voluntary reform answers the deterrence rationale that drives outsized penalties and keeps the negotiation focused on conduct rather than a theoretical maximum. New Mexico’s unexplained reduction shows that a court cannot be counted on to supply the discount later.

Challenge the unit of violation and the audience.

The gap between $375 million and $219.5 billion came from what counted as a violation and how many times it was multiplied, not from the $5,000 cap. Companies should argue that related statements are a single course of conduct, and that the relevant audience is consumers who actually saw and relied on a statement — not every account holder or resident.

Meta contended the statute did not reach New Mexicans who were not using the platform. That argument belongs in every case.

Contest willfulness statement by statement.

In New Mexico, as in many (though not all) states, penalties require willfulness, and under Atherton a knowing misrepresentation is not automatically a willful one. Because each statement is a separate multiplier, defeating willfulness as to even a few statements can remove millions of violations from the count.

Treat public statements and discovery as valuation work.

In the Cambridge Analytica litigation, statements on earnings calls and in executive interviews were each multiplied by their audience. From the civil investigative demand stage, companies should treat requests for audience, reach and transaction data as requests for penalty inputs; retain reach experts early; and contest the design of the verdict form.

Know who is across the table.

Contingency contracts are often public records, and their fee tiers and timing shape how outside counsel will view a proposal. Where outside counsel is driving the numbers, companies should press for direct engagement with the attorney general’s office, which retains control of the case.

Weigh multistate resolution carefully.

Most states resolved their Cambridge Analytica-related claims in the multistate settlement, which allocates a $459.3 million “Cambridge settlement amount.” New Mexico declined and now holds a $25 billion judgment, subject to appeal.

States that stay out, as Washington, D.C., Florida and Texas did, will cite that contrast.

Lead with conduct remedies.

The contrast between the New Mexico judgments and the multistate settlement shows that the most meaningful conduct commitments come through negotiation, not trial.

Companies should offer well-defined injunctive terms early, with measurable standards and independent verification, and argue that those terms — not a multiplied penalty — are what serve the public interest.

Preserve constitutional arguments.

The court’s treatment of the excessive fines and due process clauses, including its reliance on Meta’s revenue, will be tested on appeal. Companies should raise proportionality objections in post-trial motions and build a record tying any penalty to harm rather than to the defendant’s size.

Conclusion

Regardless of whether the New Mexico decisions survive appeal, they should not become the model. State statutes differ in units of violation, maximums, willfulness requirements and caps, so the New Mexico arithmetic does not transfer automatically.

But the method — counting everything, multiplying by everyone and letting a court sort it out — is portable, particularly in the hands of contingency-fee counsel. And as the New Mexico decrees show, chasing the largest number can come at the expense of the conduct relief that matters most to the state.

Attorneys general can best serve the citizens of their states by treating New Mexico as an outlier and maintaining the approach that has long served the public well: seeking a penalty that is fair, not the largest one a spreadsheet can produce.

Companies have a role to play too. By acting early to fix problems, cooperating with investigators and accepting meaningful conduct relief, they can show that the traditional approach serves justice better than reaching for the statutory maximum.

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[1] In re: Social Media Adolescent Addiction/Personal Injury Products Liability Litigation (MDL No. 3047).

[2] State ex rel. Torrez v. Meta Platforms Inc., No. D-101-CV-2023-02838 (Santa Fe Cnty. 2023).

[3] State ex rel. Torrez v. Meta Platforms Inc., f/k/a Facebook Inc., No. D-101-CV-2021-00132 (Santa Fe Cnty. 2021).

[4] Mike Scarcella, New Mexico’s Outside Lawyers Could Collect up to $1.27B in Meta Case, Reuters (Oct. 23, 2026); Mike Scarcella, Law Firm Motley Rice‘s Fee for Meta Case in New Mexico Could Top $67 Million, Reuters (Aug. 12, 2026).