TL;DR: In March 2026, a New Mexico jury found Meta liable for 75,000 violations of state consumer protection law and ordered $375 million in penalties, the first time any state beat a major tech company at trial over child safety. Now comes Phase 2. Starting May 5, Judge Bryan Biedscheid will decide whether Meta created a “public nuisance” and what the state can force Meta to change. AG Raúl Torrez wants age verification, algorithm redesigns, an end to autoplay and infinite scroll for kids, a five-year court-appointed monitor, and a $3.7 billion abatement fund. Meta’s response: threatening to pull Facebook and Instagram from New Mexico entirely. Torrez called it a “PR stunt.” Over 40 other states and 1,300+ school districts are watching. Whatever happens in Santa Fe could become the template for holding social media accountable everywhere.
What Happened in Phase 1
On March 24, 2026, a Santa Fe jury delivered a verdict that shook Silicon Valley. After a three-week trial, the jury found Meta liable for 75,000 violations of New Mexico’s Unfair Practices Act, each violation carrying the maximum $5,000 penalty. Total: $375 million [1].
New Mexico became the first state in the country to beat a major tech company at trial over child harm. Not a settlement. Not a consent decree. A jury looked at the evidence and said Meta knowingly endangered children.
The state proved that Meta’s platforms connected adults with minors, that the company knew its recommendation algorithms pushed harmful content to children, and that it failed to act on internal research showing the damage Instagram caused to teen mental health [2]. The jury heard testimony about predators using Meta’s platforms to groom children in New Mexico, about Instagram’s algorithm serving self-harm content to teenagers, and about how Meta repeatedly chose engagement metrics over child safety.
Meta called the verdict “deeply flawed” and said it plans to appeal [3].
Phase 2: What the State Wants
Phase 1 was about liability. Phase 2 is about consequences.
Starting May 5, Judge Biedscheid will hold a bench trial (no jury this time) to determine whether Meta’s conduct constitutes a “public nuisance” under New Mexico law. That legal framework has been used against tobacco companies, opioid manufacturers, and e-cigarette makers. Now it’s aimed at social media [4].
AG Torrez is asking for sweeping remedies:
- Age verification for all New Mexico users, with a ban on accounts for children under 13
- Algorithm redesigns to stop recommending harmful content to minors: no more self-harm content, no more predator-to-child recommendations
- Elimination of autoplay and infinite scrolling for users under 18
- A five-year court-appointed monitor with access to Meta’s internal systems to ensure compliance
- A $3.7 billion abatement fund to finance a 15-year mental health initiative for children harmed by Meta’s platforms [4] [5]
That abatement fund alone would be nearly ten times the Phase 1 penalty. Combined, New Mexico is seeking over $4 billion from Meta. For a company that made $164 billion in revenue last year, it’s a rounding error. But the platform changes? Those would be precedent-setting.
Meta’s Nuclear Option: Leave the State
Meta’s response to the Phase 2 demands landed on April 30 in a court filing that reads like a hostage note. The company said “many of the changes” Torrez’s office is seeking are “technologically impractical or completely impossible” and may force it to “withdraw from the state entirely” [5].
Think about that for a second. A company worth over $1.5 trillion is threatening to cut off Facebook and Instagram from 2.1 million New Mexicans rather than verify the ages of its users and stop feeding harmful content to kids.
Meta’s argument: it can’t implement state-specific platform changes. Building a version of Instagram with different algorithms, different recommendation systems, and different engagement features for a single state is, they say, technically unfeasible [5].
AG Torrez wasn’t buying it. He called the withdrawal threat a “PR stunt” designed to scare users and shift public sympathy [3]. In a statement from the NM Department of Justice, Torrez framed it as confirmation of the state’s case: “Meta’s refusal to protect children, even when ordered by a court, is exactly the behavior we brought this lawsuit to stop” [6].
Why Meta Won’t Actually Leave
Meta won’t pull out of New Mexico. Here’s why.
First, New Mexico has 2.1 million people. That’s 2.1 million sets of eyeballs generating ad revenue. But the real cost isn’t the New Mexico market; it’s the precedent. If Meta withdraws from one state to avoid child safety regulations, every other state attorney general will have a new talking point: Meta would rather abandon users than protect kids.
Second, 40+ states have filed similar lawsuits. If Meta leaves every state that wins in court, it won’t have a US market left [4].
Third, the judge already rejected Meta’s attempt to move the case to federal court after the Phase 1 verdict. The NM Department of Justice responded with a press release titled “After $375 Million Loss, Meta Tries to Run. Court Says No” [6]. The pattern is clear: Meta keeps trying to escape this courtroom, and the courtroom keeps saying no.
The withdrawal threat is leverage, not strategy. Meta wants Judge Biedscheid to think twice before ordering changes so drastic that they “force” Meta out of the state. It’s a negotiating tactic dressed up as a technical impossibility claim.
The Public Nuisance Playbook
The “public nuisance” legal theory is what makes Phase 2 different from a typical corporate penalty case. It’s not just about fines. It’s about forcing structural change.
Public nuisance law lets courts order companies to fix the harm they caused, not just pay for it. It’s the same framework that forced tobacco companies to fund anti-smoking campaigns, that compelled opioid manufacturers to pay for addiction treatment, and that held lead paint manufacturers responsible for poisoning children decades after the paint was applied [4].
If Judge Biedscheid finds that Meta created a public nuisance, he can order whatever remedies he determines are necessary to “abate” the harm. That could include everything on Torrez’s wish list, or it could be more. The judge has wide discretion.
Meta’s defense is straightforward: social media isn’t a nuisance, it’s a product. The company says there’s “no scientific evidence” linking social media to mental health problems in children [4]. It also points to safety features it’s already implemented, including parental controls and content restrictions for teen accounts.
The state will counter with Meta’s own internal research (the same documents that leaked in the 2021 Facebook Papers) showing the company knew Instagram was harmful to teen girls and chose not to act [2].
Why Santa Fe Matters Everywhere
This isn’t just a New Mexico story. It’s a test case for the entire country.
Over 40 states have filed similar lawsuits against Meta and other social media companies over child safety. More than 1,300 school districts have joined the litigation [4]. If New Mexico’s Phase 2 succeeds, if a judge orders platform redesigns, age verification, algorithm changes, and ongoing monitoring, every other state AG will use that ruling as a blueprint.
The implications go beyond Meta. Snap, TikTok, and YouTube all face similar public nuisance claims. A judicial finding that social media algorithms constitute a public nuisance when they harm children would reshape how every platform operates.
And then there’s Congress. Federal lawmakers have been talking about kids’ online safety for years without passing meaningful legislation. If states start winning these cases and forcing platform changes through the courts, the tech industry may suddenly find federal regulation more appealing, because a single federal standard would be easier to comply with than 50 different state court orders.
Meta knows this. It’s why a case in Santa Fe involving 2.1 million people has the company threatening to pull its platforms entirely. It’s not about New Mexico. It’s about what New Mexico means for everywhere else.
What Happens Next
- May 5, 2026: Phase 2 bench trial begins before Judge Bryan Biedscheid in Santa Fe
- Trial duration: Expected to last several weeks, with testimony from child safety experts, Meta engineers, and state officials
- Ruling: Could come weeks or months after trial concludes. There’s no jury to deliberate
- Appeal: Meta has already signaled it will appeal both the Phase 1 verdict and any Phase 2 order
- Other states: Several state AG cases are scheduled for trial in late 2026 and 2027, and all of them are watching Santa Fe
The Bottom Line
Meta built platforms that connected predators with children, amplified harmful content to teenagers, and ignored its own research showing the damage. A jury already said so. Now a judge gets to decide what Meta has to do about it.
Meta’s answer is to threaten to take its ball and go home. That tells you everything about how seriously the company takes child safety when no one’s forcing its hand. The withdrawal threat isn’t a technical argument. It’s an admission: Meta would rather abandon a state than redesign a product that harms children. It is the same pattern we have seen as Meta revives facial recognition in its smart glasses over public objections.
We’ll be covering the trial as it unfolds.
References
- CNBC: Meta must pay $375 million for violating New Mexico law in child exploitation case, jury rules (March 24, 2026)
- NPR: New Mexico jury says Meta harms children’s mental health and safety, violating state law (March 24, 2026)
- KRQE News 13: New Mexico Attorney General shares more about second phase of trial against Meta (2026)
- Manila Times/AP: Meta faces New Mexico trial that could force changes to Facebook, other platforms (May 3, 2026)
- Source New Mexico: Meta says it could withdraw Facebook and Instagram from New Mexico pending bench trial’s outcome (April 30, 2026)
- NM Department of Justice: After $375 Million Loss, Meta Tries to Run. Court Says No. (2026)
Published: May 3, 2026