This money was based on a court case between the State of Illinois and Facebook in a California Court
Yes, according to the Internal Revenue Code (IRC) Section 61, all income is taxable from whatever source derived, unless exempted by by IRC Section 104. Please view this link for the list of exclusions.
Here's a information that describes settlements that aren't taxable and other information.
How is the $397 Facebook settlement reported in my HR Tax Cut program? I never received anything in the mail for tax reporting but want to make sure to include it.