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Zuckerberg does his bit to discourage frivolous lawsuits by suing the lawyers who represented a fraudster who lay claim to half of Facebook.
The lawyers “knew or should have known that the lawsuit was a fraud.”
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Ars Technica Zuckerberg sues lawyers who represented man claiming half of Facebook http://ars.to/1puHevj by @dmkravets
Facebook founder Mark Zuckerberg is taking Shakespeare’s phrase “let’s kill all the lawyers” to a different level. On Monday, he sued many of the attorneys who represented a New Yorker named Paul Ceglia, the man who claimed Zuckerberg promised him half of Facebook back when Zuckerberg was an 18-year-old Harvard University student.
“The lawyers representing Ceglia knew or should have known that the lawsuit was a fraud—it was brought by a convicted felon with a history of fraudulent scams, and it was based on an implausible story and obviously forged documents. In fact, Defendants’ own co-counsel discovered the fraud, informed the other lawyers, and withdrew. Despite all this, Defendants vigorously pursued the case in state and federal courts and in the media,” Facebook said in a New York Supreme Court suit.
Ceglia faces trial next year on accusations that his lawsuit—in which he claimed half ownership of Facebook—was a fraud. He has pleaded not guilty and faces a maximum 40-year prison term if convicted.
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Zuckerberg’s lawsuit, meanwhile, says the lawyers were pursuing the matter in hopes of an out-of-court settlement. The suit accuses them of “malicious prosecution and deceit and collusion with intent to deceive the court.”
The lawsuit said Ceglia’s original counsel circulated a pitch document to “multiple top tier law firms that described the lawsuit and sought their help in furthering a scheme to force Facebook and Zuckerberg into an early high-value settlement.”
The lawsuit, which names nine lawyers and several law firms, accuses one of the nation’s biggest, DLA Piper, of publicly staking “its reputation on the veracity of Ceglia’s allegations.”
“One of DLA Piper’s most senior lawyers told The Wall Street Journal that he has spent weeks investigating Ceglia’s evidence and was ‘100 percent’ certain that the forged contract was authentic,” the lawsuit said.
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Businessweek Mark Zuckerberg is suing the lawyers who sued Facebook: http://buswk.co/1pylBKt
Attention, attorneys. If you go to court for a client seeking to shake down Mark Zuckerberg, you may find yourselves in the Facebook (FB) mogul’s cross hairs. Ask DLA Piper, one of the world’s largest law firms and now a defendant in a civil malicious prosecution suit filed by the Facebook chief executive officer and his company.
No, this isn’t the Social Network case. That entertaining 2010 movie depicted Zuckerberg’s legal tussle with the strapping Winklevoss twins, Tyler and Cameron, over who invented Facebook. That case settled in 2008 with the Winklevi receiving tens of millions of dollars in cash and Facebook stock—pocket change to the billionaire Zuckerberg.
Social Network apparently gave another character, one Paul Ceglia, the bright idea that he, too, could claim ownership of Facebook. In 2010, he sued Zuckerberg in New York state court, alleging that the digital tycoon had once promised him no less than 84 percent of the company that became the hugely popular and lucrative social networking site.
Eighty-four percent! You can’t fault Ceglia for lack of ambition. His suit, however, was a transparent sham based on forged documents, according to the federal judge who eventually disposed of it in March of this year. The judge based dismissal on earlier findings by a U.S. magistrate who described Ceglia’s arguments as “sophomoric” and “preposterous.” Along the way, Ceglia was criminally indicted in 2012 for seeking to defraud Zuckerberg and Facebook. The criminal charges are pending.
Not satisfied that Ceglia has been thoroughly defeated and discredited, Zuckerberg has now sued most of the law firms and individual lawyers who, at one time or another, represented Ceglia in his misbegotten grab for Facebook lucre. The most notable of these defendants is DLA Piper, a behemoth with 4,200 lawyers in 30 countries. Normally the Piper firm represents large corporations such as Facebook; in this instance, it took a spin with Ceglia that it may now deeply regret.
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Facebook joins others (ie Chevron & Alabama coal magnate) who turn to the courts to exact punishment against lawyers: http://onforb.es/1Dwuaxy
Facebook’s lawsuit filed in state court in New York accuses three partners at DLA Piper of taking on Ceglia’s case after it was shopped to numerous firms with a letter reminding them of the lucrative outcome of similar litigation by the Winklevoss twins. They agreed to represent Ceglia and filed an amended complaint in 2011, Facebook says, despite a warning from former co-counsel on the case, Kasowitz Benson, that the contract purporting to give Ceglia a majority stake in Facebook was a fake.
A Kasowitz partner discovered this after finding the original contract from April 2003 on Ceglia’s computer, Facebook says, which contained no mention of Facebook. The contract he cited in his lawsuit seeking a piece of the company did name Facebook, but on a page with different fonts and spacing than the original contract from his laptop, the lawsuit says.
What gives the lawsuit teeth is Facebook says DLA Piper lawyers knew all this because Kasowitz Partner Aaron Marks warned them in a letter dated two days after the amended complaint was filed in April 2011 that the contract likely was a fake and the lawyers should be mindful of their duties under New York law not to present false evidence in court.
DLA Piper ultimately withdrew from the case, but only after Partner Robert Brownlie, co-chair of the firm’s securities litigation practice, strongly defended his client and said anybody who claimed the case was fraudulent “will come to regret those claims,” the lawsuit says.
DLA Piper called the lawsuit against it meritless, saying it was only in the case for 78 days and Facebook went on to a successful initial public offering that made Zuckerberg a multibillionaire.
“This is an entirely baseless lawsuit that has been filed as a tactic to intimidate lawyers from bringing litigation against Facebook,” the law firm said in a statement.
Facebook, in its own statement to reporters, said:
We said from the beginning that Paul Ceglia’s claim was a fraud and that we would seek to hold those responsible accountable. 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.
Holding firms to account is a popular strategy, but one American courts tend to discourage because it can be used as a tool itself to threaten less powerful adversaries.
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