Meta Platforms sued Judang Team LLC, Perfeos LLC, Jot & Journeys, and their common principal Antonio Jose Liévano, alleging the defendants used fraudulent financial documents to obtain more than $8 million in advertising credit lines from Meta, then stopped paying invoices in April 2024 after running over 9,000 ads on Facebook and Instagram. The ads allegedly redirected consumers to e-commerce sites where some received counterfeit or no goods and others were charged unauthorized recurring subscription fees. Defendants also allegedly blocked more than 1,000 words and phrases from their Facebook Pages associated with poor product quality, failure to deliver products, slow delivery times, and negative customer experience.
Magistrate Judge Thomas S. Hixson of the Northern District of California denied the Rule 12(b)(6) motion on January 20, 2026, holding that Meta stated cognizable claims for both breach of contract and fraud under California law.
On the breach of contract claim, defendants argued that Liévano lacked privity because the alleged breaches were corporate acts. The court rejected that argument as to Jot & Journeys, an unincorporated Florida business, reasoning that a sole owner of an unincorporated entity is not a legal entity separate from its individual owner, so J&J's entry into Meta's platform agreements bound Liévano directly. The court also held that Meta's group pleading did not violate Rule 8 because the complaint defined "Defendants" collectively, parsed individual conduct where necessary, and gave each defendant fair notice of the specific contracts and breaches alleged.
On the fraud claim, defendants invoked California's economic loss doctrine, arguing the fraud allegations were simply a repackaged breach of contract. The court held the doctrine inapplicable because Meta alleged fraudulent inducement — defendants submitted false balance sheets, income statements, and banking records to induce Meta to extend credit lines in the first place. The court cited Robinson Helicopter Co. v. Dana Corp. for the principle that tort damages are available where a contract was fraudulently induced, and reasoned that while the parties' contracts may have covered Meta's risk of non-payment associated with extending credit lines, those contracts did not contemplate that Meta would calculate its risk based upon defendants' false creditworthiness.
On Rule 9(b) particularity, the court held that Meta satisfied the who-what-when-where-how standard by identifying each defendant as a submitter of false financial documents, specifying the credit line applications as the vehicle, providing the submission dates, identifying Meta's online platform as the forum, and attaching copies of the balance sheets to the complaint. The court further held that collective fraud allegations are not deficient where multiple defendants engaged in precisely the same conduct, citing Ninth Circuit authority from United States v. United Healthcare Insurance Co. and Anita Silingo v. WellPoint, Inc.
The case, docketed as 25-cv-05156, proceeds to the merits.