Facebook and CEO Mark Zuckerberg sued a handful of lawyers who represented Paul Ceglia in a 2010 case in which Ceglia claimed he was entitled to 84 percent ownership of the social network.
Ceglia’s claim was dismissed earlier this year after Facebook and Zuckerberg alleged that Ceglia forged the documents he used as evidence of his ownership in the company. (Ceglia was actually arrested in 2012 for falsifying these records; the case is still pending.)
Monday’s lawsuit, which Facebook filed in New York County Supreme Court, claims Ceglia’s lawyers “knew or should have known that the [initial] lawsuit was a fraud.”
In 2003, before Facebook officially launched, then Harvard-student Zuckerberg completed website design work for Ceglia’s company at the time, Street Fax, according to documentation Facebook filed Monday. The company claims that the work-for-hire documentation Zuckerberg signed in 2003 was then repurposed and forged in 2010 to show Zuckerberg had promised Ceglia a large stake in Facebook.
Now Facebook is suing Ceglia’s lawyers, including DLA Piper, a firm that ultimately withdrew from the Ceglia case but not before telling the Wall Street Journal in 2011 that they had “100 percent confidence that [Mr. Ceglia’s] agreement is authentic.” In total, Facebook lists more than a dozen defendants in the lawsuit.
“We said from the beginning that Paul Ceglia’s claim was a fraud and that we would seek to hold those responsible accountable,” Facebook General Counsel Colin Stretch said in a statement given to Re/code. “DLA Piper and the other named law firms knew the case was based on forged documents, yet they pursued it anyway, and they should be held to account.”
Peter Pantaleo, DLA Piper’s general counsel, sent Re/code the following statement in response to the lawsuit:
“This is an entirely baseless lawsuit that has been filed as a tactic to intimidate lawyers from bringing litigation against Facebook. DLA Piper, which was not part of this case at its outset or its conclusion, was involved for 78 days. Facebook and Mr. Zuckerberg claim that they were damaged in those 78 days, yet a mere 10 months after DLA Piper withdrew from the case and while the litigation was still pending, Facebook went to market with an initial public offering that valued the company at $100 billion. Today, Facebook is worth $200 billion and Mr. Zuckerberg is among the richest people in the world. We will defend this meritless litigation aggressively and we will prevail.”
Facebook has never filed suit against Ceglia himself, and a company spokesperson declined to comment on whether or not it plans to take legal action against him directly. Ceglia is already scheduled to appear in court next May to face criminal charges that he forged the work-for-hire documents at issue.
Facebook did not specify a monetary amount for damages in Monday’s lawsuit, but is seeking payment for attorney fees and “damage to reputation and harm to business interests” for the company. Of course, Facebook doesn’t need money; Monday’s suit appears to be more about payback than anything.
Thanks to Kurt Wagner and Re/Code, and
Thanks for “listening”
The Neu Facebook