Bloomberg News

Facebook Claimant Fined $5,000 for Failure to Produce E-Mail

January 12, 2012

(Updates with lawyer’s comment in sixth paragraph.)

Jan. 11 (Bloomberg) -- Paul Ceglia, the New York man claiming to own a stake in Facebook Inc., was fined $5,000 for failing to provide access to his e-mail accounts in his lawsuit against the company.

U.S. Magistrate Judge Leslie Foschio in Buffalo, New York, ruled yesterday that Ceglia showed “a plain lack of respect” for a court order requiring him to turn over to Facebook the addresses and passwords for all e-mail accounts he has used since 2003.

Foschio ordered Ceglia to pay the fine and reimburse Facebook for its legal fees connected to the e-mail dispute. Foschio said Ceglia disregarded his lawyers’ advice to comply with the order.

“Plaintiff, fully advised by his attorneys not to do so, chose to knowingly ignore the unambiguous orders of the court,” Foschio wrote.

Ceglia’s attorney, Dean Boland of Lakewood, Ohio, said his client won’t seek to appeal the ruling. The failure to follow the e-mail order occurred before Boland took over as Ceglia’s lead counsel in October, he said. Three other legal teams have left the case since Ceglia sued in June 2010.

“When a judge orders you to do something, you’ve got to do it,” Boland said in a phone interview.

Orin Snyder, a lawyer who represents Palo Alto, California- based Facebook in the suit, didn’t immediately return a call seeking comment on the ruling.

2003 Contract

Ceglia claims a 2003 contract entitles him to half the Facebook holdings of the social-networking company’s co-founder and chief executive officer, Mark Zuckerberg.

In an amended complaint filed in the case, Ceglia quoted e-mails between him and Zuckerberg that he says support his suit. Facebook has said that the e-mails were fabricated and that the two-page contract produced by Ceglia is a forgery.

The requirement that Ceglia turn over his e-mail accounts was part of an expedited discovery process in which the parties exchange evidence to determine whether Ceglia’s contract and e-mails are genuine.

Both sides agree that Zuckerberg signed a contract with Ceglia in 2003, when Zuckerberg was a freshman at Harvard University, to do computer coding for StreetFax.com, a company Ceglia was trying to start. Ceglia claims the contract included a provision giving him a partnership stake in Facebook, now the world’s biggest social-networking site.

StreetFax Work

The company said its computer experts have found the genuine contract between Ceglia and Zuckerberg, which concerns only the StreetFax work, on one of Ceglia’s computers. The contract makes no mention of Facebook, according to the company.

In a separate decision yesterday, Foschio denied Ceglia’s request that the judge sanction Facebook for failing to disclose the existence of five computers, used by Zuckerberg when he was a student at Harvard, which were part of an earlier suit. In that case, former Harvard students Cameron and Tyler Winklevoss and Divya Narendra claimed Zuckerberg stole the idea for Facebook from them.

The Winklevosses and Narendra settled in 2008 for $65 million, then tried to reopen the case, claiming Facebook may have improperly withheld instant messages and other information in the suit.

Foschio said Facebook didn’t mislead the court about Zuckerberg’s Harvard computers and didn’t improperly try to destroy forensic copies of the computers created for the earlier case, as Ceglia claimed.

“We will eventually get those computers in discovery,” said Boland. “And that will be an interesting day, to see what’s on those.”

The case is Ceglia v. Zuckerberg, 1:10-cv-00569, U.S. District Court, Western District of New York (Buffalo).

--Editors: Andrew Dunn, Charles Carter

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus