Facebook Ownership Case Documents Can't Be Kept Confidential, Judge Rules
Facebook Says Ceglia Computers Show ‘Smoking Gun’ of Fraud
Andrew Harrer/Bloomberg
Facebook Inc. said its inspection of computers turned over by Paul Ceglia, the western New York man who claims he’s entitled to half of Chief Executive Officer Mark Zuckerberg’s holdings in the social-networking company, shows “smoking gun” evidence of fraud.
Facebook Inc. said its inspection of computers turned over by Paul Ceglia, the western New York man who claims he’s entitled to half of Chief Executive Officer Mark Zuckerberg’s holdings in the social-networking company, shows “smoking gun” evidence of fraud. Photographer: Andrew Harrer/Bloomberg
Paul Ceglia, the western New York man who claims he’s entitled to part-ownership of Facebook Inc., can’t keep dozens of documents found on computers he owned confidential, a judge ruled.
U.S. Magistrate Judge Leslie Foschio in Buffalo, New York, ruled yesterday that Ceglia’s lawyers improperly designated all 120 of the documents, including versions of the contract Ceglia claims he signed with Facebook co-founder Mark Zuckerberg in 2003, as confidential.
Foschio removed the confidential designation from 85 of the documents. He gave Ceglia’s lawyers until Aug. 17 to turn over four copies of the contract, which they claimed were subject to attorney-client privilege.
Foschio last month ordered Ceglia to let Facebook run forensic tests on his computers, hard drives and electronic storage media, as well as on the contract and the e-mails he says support his claim. In court papers filed last week, Palo Alto, California-based Facebook said its inspection, by the computer forensics firm Stroz Friedberg LLC, turned up “smoking gun” evidence of fraud.
Ceglia, 38, sued Facebook and Zuckerberg last year, claiming that a two-page contract Zuckerberg signed in 2003 gave Ceglia half of the company when the service was started the following year. Facebook has grown to become the world’s biggest social-networking site, valued at as much as $69.2 billion, according to Sharespost.com, an online marketplace for investments in companies that aren’t publicly traded.
27 E-Mails
In the order yesterday Foschio left in place confidentiality designations that Ceglia’s lawyers placed on 27 e-mails between Ceglia, Zuckerberg and people involved with developing the website for StreetFax, a company Ceglia was trying to launch at the time.
Zuckerberg agrees he signed a contract with Ceglia to do computer coding on the StreetFax project. The contract he signed, when he was a student at Harvard University, had nothing to do with Facebook, Zuckerberg said in court papers. Ceglia claims he and Zuckerberg signed an agreement that gave him part ownership of Facebook in exchange for providing some of the early funding.
Facebook lawyer Orin Snyder had no immediate comment on Foschio’s ruling. Jeffrey Lake, a lawyer for Ceglia, didn’t return a voice-mail message seeking comment.
The case is Ceglia v. Zuckerberg, 1:10-cv-00569, U.S. District Court, Western District of New York (Buffalo).
To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net.
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.
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