Vice Chancellor Travis Laster of the Delaware Chancery Court indicated that evidence suggested Sandberg utilized a personal account under a pseudonym to delete communications that were likely significant to the shareholder lawsuit.
This sanction complicates Sandberg's ability to present her defense and mitigate liability in the upcoming eight-day, non-jury trial set for April. Additionally, the judge mandated that she cover the costs associated with the sanctions motion filed by the shareholders, which includes expenses from California's prominent teachers' retirement system, CalSTRS.
Laster noted in his opinion released on Tuesday that Sandberg's selective deletion of items from her Gmail account likely resulted in the loss of critical and sensitive communications.
Neither Meta nor Sandberg's attorney provided an immediate response to requests for comment.
Sandberg contended that she had been transparent about her use of the personal account, asserting that it was infrequently used for business purposes and that when it was, others were included in the correspondence to ensure the information remained accessible.
The judge applied a more stringent standard of "clear and convincing evidence" for Sandberg's affirmative defenses, as opposed to the usual "preponderance" of evidence standard.
The lawsuit originated in 2018, following revelations that Facebook permitted access to data from millions of users by Cambridge Analytica, a political consulting firm that played a role in Donald Trump's successful 2016 presidential campaign. Shareholders subsequently filed suit against the company's directors and officers, alleging that they had harmed investors by repeatedly breaching a 2012 consent order with the Federal Trade Commission aimed at safeguarding user data.
Shareholders have claimed that the company's board negotiated a settlement to pay a $5 billion fine to the FTC in 2019 to shield founder Mark Zuckerberg from personal liability. Court records indicate that Zuckerberg is anticipated to be deposed for a second time prior to the trial's commencement.
In 2023, Judge Laster declined to dismiss the lawsuit, describing it as a "case involving alleged wrongdoing on a truly colossal scale."
Additionally, shareholders requested that Laster impose sanctions on Jeffrey Zients, who served as chief of staff under former President Joe Biden and utilized personal emails during his tenure on Meta's board. The judge noted that Zients' communications were less relevant, as he joined the Meta board in 2018, following the Cambridge Analytica incident, and did not hold an executive position within the company.