By Mike Scarcella
WASHINGTON, Aug 12 (Reuters) - Law firm Motley Rice stands to earn $67.1 million in legal fees from New Mexico for representing the state after a judge ruled Meta Platforms fostered social media addiction and other harms on its platforms, according to a Reuters analysis of a state contract.
A judge last week sided with New Mexico and ordered Meta to pay $567 million. A jury hearing a different part of the same case levied $375 million in civil penalties in March, bringing New Mexico's
potential recovery to more than $942 million. Meta has said it will appeal.
A 2024 contract between Motley Rice and New Mexico, obtained by Reuters through a records request, says the firm may seek fees based on the size of Meta's eventual payout. Motley Rice can ask the court to award it 20% of the first $50 million of the state's recovery, 15% of the next $50 million, 10% of the next $100 million, and 5% of any amounts over $250 million.
Under those terms, if New Mexico ultimately recovers $942 million, South Carolina-based Motley Rice could ask for an award of $67.1 million. The amount, representing 7% of the state's total recovery, would come out of the funds Meta pays to New Mexico.
Motley Rice in a statement said it was premature to discuss payment. “We will proudly continue to support the New Mexico Department of Justice in holding Meta accountable for violating the law and putting children at risk,” it said.
The contract says the firm must formally petition the court for fees, which would happen after appeals in the case have concluded. The contract expires in 2028 and covers work Motley Rice is handling for New Mexico on "social media impacts on mental health harm" and related issues.
It is common for states to partner with private law firms for high-profile, complex investigations and lawsuits. The firms typically work on a contingency basis, taking a portion of any recovery.
Lauren Rodriguez, New Mexico Attorney General Raúl Torrez’s chief of staff, in a statement said the fees Motley Rice could receive would be "well below New Mexico’s historical average and substantially below the 19% to 35% fees seen in other complex, state-led litigation."
"The New Mexico Department of Justice is proud of the work Motley Rice has done alongside our internal litigation team to achieve this historic result for the people of New Mexico," Rodriguez said.
Motley Rice, which employs more than 100 attorneys, has frequently represented states in cases against corporate defendants, including as far back as the nationwide tobacco litigation that ended in a massive 1998 settlement.
The firm separately represents school districts and other plaintiffs in coordinated federal lawsuits in California claiming Meta and other social media companies designed social media platforms to addict young users. A federal appeals court on Monday said those cases can move forward.
A trial in one of the lawsuits, not involving Motley Rice, began on Wednesday in the federal court in Oakland.
(Reporting by Mike Scarcella; Editing by David Bario and Stephen Coates)
