By Mike Scarcella
WASHINGTON, Oct 23 (Reuters) - Private plaintiffs' lawyers stand to collect up to $1.27 billion from New Mexico if the state's $25 billion court win against Meta Platforms this week is upheld, according to a Reuters review of a contract with the state.
New Mexico hired Chicago-based law firm DiCello Levitt to represent it in the Meta case, which alleged the tech company duped its users about who had access to their personal data on its Facebook platform.
The state's 2025 contract with
DiCello Levitt, reviewed by Reuters after a records request, says the firm can ask the judge overseeing the case to award it 20% of the first $50 million of any eventual recovery, 15% of the next $50 million, 10% of the next $150 million and 5% of any amounts over $250 million.
New Mexico and other states have turned to private law firms in a growing number of cases against major technology companies to buttress their legal teams against deep-pocketed defendants. The outside lawyers typically don't charge by the hour but are entitled to a cut of any winnings.
In the Meta case, a jury sided with the state in September, and a judge on Wednesday ordered the company to pay $25 billion. Meta denied wrongdoing and said it will appeal. Legal experts including Villanova University law professor Peter Ormerod told Reuters this week that the company has a strong basis for arguing that the judgment should be reduced.
If New Mexico ultimately recovers $25 billion from Meta, DiCello Levitt's fees could reach $1.27 billion under the law firm's contract. The amount would come out of the funds Meta pays to New Mexico.
UNCERTAINTY OVER FINAL PAYOUT
To be sure, Meta could win its appeal or the judgment could be trimmed, and the court is not obligated to award the firm the maximum fees allowed under its contract.
DiCello Levitt declined to comment about its fees. New Mexico's lead lawyer at the firm, Corban Rhodes, in a statement called the court's decision a "defining moment for consumer protection and privacy."
Randi McGinn, a New Mexico lawyer who worked with the DiCello firm in representing the state, told Reuters her small Albuquerque firm is entitled to collect about 33% of its fees. DiCello's contract allowed the firm to designate other lawyers as subcontractors.
McGinn, who delivered the state's opening statement and closing argument, cautioned that a final outcome in the case could take several years.
“People will say it’s a lot of money. But the truth is, we won’t see any of that money unless we win an appeal,” McGinn said.
Contingency fee awards over $1 billion are exceedingly rare, said Fordham University law professor Howard Erichson. While New Mexico's contract caps fees for DiCello Levitt near 5%, "the sheer size of the recovery means it could result in a massive fee here, so I would expect the court to examine it carefully," Erichson said.
The New Mexico attorney general's office and a Meta spokesperson did not immediately respond to requests for comment about the legal fees.
STATES TURN TO PRIVATE FIRMS
Some companies and business groups say that giving private lawyers a stake in state enforcement actions can put lawyers' financial interests in conflict with public policy concerns. Defenders of the practice counter that it helps level the playing field for states going up against companies that can afford armies of lawyers.
The rewards can be substantial. Norton Rose Fulbright is set to receive more than $156 million in legal fees for representing Texas in a consumer privacy case that Google settled for $1.375 billion. Law firms Keller Postman and McKool Smith billed Texas $142.6 million in a consumer privacy lawsuit against Meta that led to a $1.4 billion settlement in 2024.
DiCello Levitt's contract mirrors one between New Mexico and Motley Rice for a separate lawsuit alleging Meta fostered social media addiction and other harms on its platforms. Meta denies the claims.
Motley Rice could seek up to $67.1 million in that case if appeals courts uphold a pair of rulings totaling $942 million against Meta.
Wednesday’s ruling came in a case New Mexico filed in 2021 against Meta after disclosures that British political consulting firm Cambridge Analytica obtained data from as many as 87 million Facebook users without their consent. The now-defunct Cambridge Analytica used the data for voter profiling and targeting.
(Reporting by Mike Scarcella in Washington; Editing by David Bario and Matthew Lewis)
