June 18 (Reuters) - A U.S. judge rejected Meta

Platforms' ( META ) bid to dismiss a lawsuit by billionaire

Australian mining magnate Andrew Forrest over scam Facebook

advertisements that show him promoting fake cryptocurrency and

other fraudulent investments.

In a decision on Monday, U.S. District Judge Casey Pitts in

San Jose, California said Australia's second-richest person can

try to prove that Meta's negligence in allowing the ads breached

its duty to operate in a commercially reasonable manner.

Forrest can also try to prove that his name and likeness was

misappropriated by Meta, and not just by fraudsters behind the

bogus ads.

"Dr. Forrest claims that Meta profited more from ads that

included his likeness than it would have if the ads had not,"

Pitts wrote. "This is enough to adequately plead that the

alleged misappropriation was to Meta's advantage."

Lawyers for Meta declined to comment on Tuesday.

The Palo Alto, California-based company had argued that

Section 230 of the federal Communications Decency Act immunized

it from liability as a publisher of third-party content.

But the judge said Forrest's claims "present a factual

dispute regarding whether Meta's ad systems were neutral tools

that anyone could use (or misuse) or whether the tools

themselves contributed to the content of the ads."

Forrest said more than 1,000 of the ads appeared on Facebook

in Australia between April and November 2023, leading to

millions of dollars in losses for victims.

The 62-year-old is executive chairman of iron ore producer

Fortescue Metals Group, and with his family is worth

US$16.5 billion (AUD$24.8 billion), according to Forbes

magazine.

In a statement, Forrest said Pitts' decision was the first

where a social media company was unable to invoke Section 230

immunity in a U.S. civil case over its advertising business.

"This is a crucial strategic victory in the battle to hold

Facebook accountable," he said.

Forrest is seeking compensatory and punitive damages.

In April, Australian prosecutors declined to pursue criminal

charges that he brought against Meta in that country over scam

cryptocurrency ads.

Forrest had sued under Australian laws that let individuals

criminally prosecute foreign companies upon receiving

prosecutors' consent.

The case is Forrest v Facebook Inc et al, U.S. District

Court, Northern District of California, No. 22-03699.